Investopedia

Continue to Site »

Set-Off Clause

Filed Under » ,
Dictionary Says

Definition of 'Set-Off Clause'

A legal clause that gives a lender the authority to seize a debtor's deposits when they default on a loan. A set-off clause can also refer to a settlement of mutual debt between a creditor and a debtor through offsetting transaction claims. This allows creditors to collect a greater amount than they usually could under bankruptcy proceedings.
Investopedia Says

Investopedia explains 'Set-Off Clause'

If a debtor is unable to meet an obligation to his or her bank, the bank can seize the customer's current deposit. Set-off provisions are not limited to loans between banks and their customers, but are also widely used in other industries, such as construction.

The Truth in Lending Act prohibits set-off clauses from applying to credit card transactions; this protects consumers who decline to pay for defective merchandise.

Articles Of Interest

  1.

    Top 9 Solutions To An Unexpected Tax Bill

    Finding out you owe when you expected a refund is a nasty shock. Find out how to cope.

  2. IRS Asset Seizures: Could It Happen To You?

    If you can't pay your taxes, know that the IRS has many avenues for collecting what you owe.

  3. Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.

  4. What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.

  5. 7 Unconventional Ways Businesses Can Borrow Money

    Find out how your business can get the money it needs - even when the bank says "no".

  6. Taxable Rewards To Be Aware Of

    Find which benefits from reward programs count as income in the eyes of the IRS.

  7. Financial Solutions For Young Women

    Break through the stereotypes and find out how to manage your life to meet your needs.

  8. Do You Dare Sue Your Broker?

    A financial damages claim is not for the fainthearted, but it may be worth it in the end.

  9. Bloated Budget? How To Trim The Fat

    Blood, sweat and tears should belong in the gym, but your money deserves some training time too.

  10. Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  2. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  3. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  4. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  5. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  6. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
Trading Center
Array ( )
taggroups(for debug only):
Array ( [0] => Credit & Loans [1] => What's New [2] => Student Finance [3] => Reducing Debt Couple [4] => Reducing Debt [5] => Paying Off Household Debt [6] => Reducing Debt Retirement [7] => Personal Finance [8] => SEG (Credit Card Applicants) ) time:9ms